What Types of Industrial Spaces Exist?
What Types of Industrial Spaces Exist?
Not everyone automatically feels comfortable navigating the industrial environment. The differences between various types of industrial spaces are not always obvious at first glance, and selecting the right one can be more complex for companies than it may seem. That is why we sat down with our industrial real estate expert, Denisa Dubinová, to better explain what types of industrial spaces exist today, how they differ from each other, and how they are generally categorized.
What are the basic types of industrial spaces?
Today, the market primarily distinguishes between warehouse, production, and logistics spaces. Although they may appear similar at first glance, their technical specifications and use cases differ significantly.
Production facilities are generally more technically demanding. They often already include installed technologies or production lines and place higher demands on aspects such as floor flatness, energy capacity, and the overall working environment. These spaces are designed with the production process itself and its efficiency in mind.
Warehouse spaces, on the other hand, are optimized for storage and goods handling. They typically make greater use of vertical space, which is why clear height plays a more important role than in production facilities. Loading and unloading docks are also a key feature, enabling efficient distribution.
What is the main difference between warehouse and production operations?
In warehouse facilities, speed and efficiency of dispatch are crucial. Warehouses are often “lined” with loading docks and provide sufficient maneuvering areas to efficiently manage both incoming and outgoing goods.
Production facilities, however, operate in a more structured way. There is usually a clearly separated area where manufacturing takes place and another area designated for the dispatch of finished products. Materials often arrive at one specific point and are then distributed to the production line, while finished goods are directed to dispatch or a connected storage area.
Does production always include a warehouse?
In most cases, yes. In approximately 90% of production operations, a warehouse is part of the facility, although its size can vary significantly.
It depends on the type of production, the size of stored components, and the speed of dispatch. Companies that ship daily often require smaller storage areas because goods move quickly. However, if products need to be stored for longer periods or additional processes such as packaging take place on site, larger storage areas are necessary.
Do the requirements of local and multinational companies differ?
The differences between local and multinational companies often do not lie in the type of production itself, but rather in internal rules and standards that companies must follow.
Multinational corporations typically have stricter requirements, for example in the area of sustainability or ESG. This can translate into specific demands on developers, such as green roofs or energy-efficient solutions. Local companies usually do not impose these requirements to the same extent. As for the internal layout of the premises, it cannot be said that needs differ significantly.
Why can’t former production facilities simply be used for logistics or e-commerce?
A common misconception is that a logistics or e-commerce operation can be placed into a space originally designed for production without major modifications. In practice, this often does not work.
Such buildings usually do not have a sufficient number of loading docks or the necessary infrastructure to handle high volumes of dispatch and goods handling. The operational flow of goods in production and logistics differs completely, which can lead to operational complications and additional costs.
What role does location play in industrial real estate?
Location is crucial. Logistics parks are now most often located outside residential areas, ideally near motorway connections, in order to minimize traffic and noise impact.
Historically, production facilities were often situated in city centers, which is no longer the standard today. This is one of the reasons why there are many brownfield sites in the Czech Republic. Current regulations regarding noise, emissions, and transport would often not allow manufacturing in city centers, which is why new production operations are increasingly being located outside urban areas.
Which types of industrial spaces are currently most in demand?
In the Czech Republic, the highest demand is currently for logistics spaces, especially within the 3PL segment. The country is gradually becoming more of a transit and logistics hub rather than a manufacturing base, which is reflected in the structure of demand.
Production plants are slowly declining, while logistics and warehouse automation are on the rise. It is no longer just about traditional storage, but about increasingly sophisticated solutions that place new demands on technology, safety, and operations.
Does automation mean job losses?
Automation changes the structure of job positions, but it does not automatically mean job losses. On the contrary, new types of roles are being created and demand for qualified employees is increasing. At the same time, the share of workers from third countries is growing, reflecting developments in the labor market.
How can iO Partners help with selecting the right space?
From an advisory perspective, detailed market knowledge is essential. At iO Partners, we know which locations and industrial parks had specific uses in the past, where production has ceased, and where zoning plans allow only logistics or manufacturing.
Thanks to this knowledge, we can recommend solutions that make sense not only in terms of current needs, but also in line with the company’s long-term strategy.
Senior Consultant
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